Downgraded US Presidential Election May Cost the Nation its AAA Rating, Says Fitch

US Presidential Election

Fitch Reports issued a report on Monday that the presidential election of the US will be closely monitored by the credit ratings firm for ‘any departure’ from the orderly transfer of powers of America’s history.

Not only will the faith in a democracy be hampered, but a chaotic presidential election may also lead to the United States losing its ideal credit ratings.

Fitch Report on the Presidential Election

The report said that the US has been rewarded with the perfect AAA credit rating mostly due to its strong governance. It also includes a strong understanding of rules and procedures for the transfer of power, it added.

“Fitch would view a departure from this principle negatively in considering the US rating,” Fitch said. To rephrase, Fitch could retract its AAA rating given to the US in case of a messy presidential election.

An unpleasant presidential election could lead to investors losing their confidence and in turn, will create turmoil in the financial market. A messy presidential election could lead to increased expenses for the US in financing its debt.

United States received a negative outlook from Fitch due to the ‘ongoing deterioration’ in the public finances sector of the nation and the absence of an initiative to address it.

According to Fitch, it will closely monitor to see if the presidential elections are ‘broadly accepted.’ It will also supervise that on 20th January 2021, there is “orderly retention or transition of power.”